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Holden pushes on with factory study

Body line: Holden is pressing on with plans for new models, even though they might not eventuate.

Engineers to start planning Holden factory rejig for new models, despite doubts

5 Nov 2013

GM HOLDEN is set to start preliminary work on reconfiguring its Elizabeth plant in South Australia for its next-generation models, even though a decision to continue production in Australia beyond 2016 is still hanging in the balance.

Production engineers will take advantage of the company’s three-week factory shutdown over Christmas-New Year to work out how to reorganise the factory’s body shop system to handle the two new models on a single body line instead of the current two, should those models get the green light.

The study, for which Holden has budgeted $250,000, is being done on the assumption that replacement models for the current VF Commodore and Cruze will go ahead in 2016-17.

The move indicates that Holden’s parent, General Motors, has not yet decided to withdraw from manufacturing in Australia, as some pundits have claimed.

But the relatively small scale of the investment also indicates that the company has not yet committed to staying in Australia, either.

Along with Toyota Australia and parts manufacturers, Holden is awaiting a federal government decision on future levels of support – financial and otherwise – for the Australian motor industry.

Although Holden is said to have asked the government and industry minister Ian Macfarlane for clarity on car plan policy before Christmas, the decision by Holden to schedule the plant study over the summer break indicates it does not expect to make a call on local manufacturing until at least the New Year.

According to a Holden insider, the plant engineering study will focus on the nuts and bolts of a potential reorganisation of the body shops at Elizabeth to achieve a more efficient layout.

Under the current system, the rear-wheel-drive Commodore and front-wheel-drive Cruze bodies are built in separate body shops – called North and South – and then fed into the paint shop before heading down the general assembly line.

The proposal to use a single body shop system indicates that the two new models could be closer in architecture than the current cars, making it easier to combine them on the one line.

The study will examine issues such as how the production line rail would run through the plant, what robots would be need to be changed and what processes would need to be reconfigured.

Such a move would help streamline the process and thus make much-needed efficiency gains at the factory that is said to be financially borderline, at best.

Ironically, the plant is working flat out right now, as the new VF Commodore and its derivatives are selling strongly across Australia.

As well, the plant is pumping out the Commodore’s Chevrolet offshoot, the SS, for export to the United States where the launch of the V8-powered sports sedan is imminent.

The factory also needs to build stock to cover the forward order bank for the three-week production shutdown from mid-December until the New Year.

The engineers will then take advantage of this quiet period to get into the plant for an uninterrupted inspection of the body line to allow them to start planning for a new era – should GM make that call.

GM Holden chairman and managing director Mike Devereux has stated that replacements for the current two models would go into production about 2016-17.

Presumably, the two models would be introduced one at a time, meaning some overlap with the current manufacturing process in that period.

In the meantime, the federal government has asked the Australian Productivity Commission to deliver a report on the potential future of the local car industry, including the parts sector.

An interim report is due next month, with the full report to be delivered by the end of March by which time GM might well have already made the call on the future of Holden manufacturing.

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